New sausage system with installed cost

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Dog Up! Franks is looking at a new sausage system with an installed cost of $873,600. This cost will be depreciated straight-line to zero over the project's 5-year life, at the end of which the sausage system can be scrapped for $134,400. The sausage system will save the firm $268,800 per year in pretax operating costs, and the system requires an initial investment in net working capital of $62,720. If the tax rate is 30 percent and the discount rate is 15 percent, what is the NPV of this project?

Reference no: EM131888268

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